Nifty Ends Negative With Worst September Decline Since 2018

Indian benchmark indices extended their decline on Wednesday as investors remained cautious amid sustained foreign fund outflows, higher crude oil prices and weak global cues.

The Nifty 50 opened at 22,665 and initially showed strength, climbing towards the day’s high of 22,809.35 during afternoon trade. However, gains failed to sustain as profit booking emerged at higher levels, dragging the index below the 22,700 mark in the final trading hour. The index touched an intraday low of 22,595.20 before closing near the day’s lower range.

The Nifty 50 settled at 22,620.45, down 95.75 points or 0.42%. The Sensex declined 48.78 points or 0.07% to close at 72,480.29. The Bank Nifty outperformed the benchmark indices and ended higher by 0.69%, supported by gains in select banking stocks. India VIX remained largely stable, indicating limited change in expected market volatility.

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Nifty Records Weakest September Since 2018

According to historical seasonality trends, the Nifty 50 witnessed its weakest September performance since 2018. The index also ended the July–September quarter (Q2 FY27) with a decline of more than 5%, marking a challenging period for Indian equities amid foreign investor selling, global uncertainty and pressure across key sectors.

The market faced multiple headwinds during the quarter, including elevated crude prices, rising global bond yields and concerns around foreign capital flows.

IT Index Suffers Worst September Performance in Nearly Two Decades

The IT sector emerged as the biggest drag during September, with the Nifty IT index declining 11.18% during the month. This marked its sharpest September fall in nearly two decades.

The decline was driven by concerns over slower global technology spending, uncertainty around demand recovery, AI-led disruption fears and elevated valuations across technology stocks. Investors remained cautious as markets assessed the impact of artificial intelligence adoption on traditional technology service models.

US Futures Trade Flat Ahead of Opening Bell

US stock futures were trading largely sideways on Wednesday as investors assessed interest rate expectations, bond yield movements and global market developments.

Dow Jones futures traded at 51,748, higher by 46 points or 0.09%, while S&P 500 futures gained 4 points or 0.05% to 7,736. Meanwhile, Nasdaq 100 futures declined 23.25 points or 0.08% to 30,590.

The mixed movement reflected a cautious global setup, with market participants tracking economic data, technology stocks and movements in US Treasury yields.

European Markets Trade Mixed Amid Cautious Sentiment

European markets traded mixed on Wednesday as investors monitored global economic signals and bond market trends.

Germany’s DAX was marginally lower at 25,364.73, declining 10.56 points or 0.04%. France’s CAC 40 slipped 36.98 points or 0.46% to 7,998.89. Meanwhile, the UK’s FTSE 100 outperformed regional peers, gaining 18.08 points or 0.17% to 10,654.79, supported by strength in select heavyweight stocks.

Brent Crude Gains Ahead of Monthly Rise

Brent crude moved back towards $97 per barrel on Wednesday and was heading for a monthly gain of more than 7% as uncertainty around US-Iran negotiations continued to support prices.

Although Saudi Arabia restored shipments through its East-West pipeline, Middle East crude exports recovered close to pre-war levels at around 17.5 million barrels per day. Markets continued monitoring developments around the Strait of Hormuz and potential supply disruptions.

US inventory data showed higher crude and gasoline stocks, while distillate inventories declined. Official EIA inventory data remained a key factor for near-term oil price direction.

Rupee Under Pressure Amid Global Headwinds

The Indian rupee remained among Asia’s weaker currencies, declining 0.7% in September and 1.2% during Q2 FY27 due to high crude prices, rising global bond yields and foreign outflows.

The rupee closed at 95.83 per US dollar, supported by continued RBI intervention through dollar sales. Currency movement remained influenced by global risk sentiment, oil prices and foreign capital flows.

Broader Market Shows Mild Recovery

The broader market ended marginally positive despite weakness in frontline indices.

The Nifty Midcap 100 index gained 0.02%, while the Nifty Smallcap 100 index advanced 0.27%.

Market participation remained mixed, reflecting selective buying interest in mid and small-cap stocks.

Sector Performance: Media Leads, Pharma Faces Selling Pressure

Eight out of 11 major sectoral indices closed in positive territory.

The Nifty Media index was the top sectoral performer, rising 0.78%. Sun TV Network was among the key gainers, surging more than 7%.

On the other hand, the Nifty Pharma index declined 1.84%, making it the worst-performing sector on Wednesday and also among the weaker sectors during September.